Bob,

I am thinking about installing a return pipe on my hot water
feed to the kitchen to reduce the amount of cold water that
is wasted before the hot water has reached the sink.

If you're only recirculating the kitchen line, I doubt you'll save enough
water to matter.

I installed a recirculating system in our house, for convenience, not
energy savings. With long 3/4" supply lines and low flow shower heads, we
were waiting well over a minute each morning for hot water to reach the far
shower. While it did waste a lot of water, it simply wasn't convenient.
After installing the recirculating system, we have hot water in about 5
seconds (nearly instantaneous on the full flow tub faucet).

Where is the best place to make the connection close to the
hot water tank?

Usually, the return line is plumbed into the drain valve at the bottom of
the hot water tank, with a tee for the drain so you can still empty the
tank. But, my tank sits in a small alcove down in a deep drip pan. So, I
couldn't make a connection there. Instead, I put a tee on the cold water
inlet, and tied my recirculation line in there. It requires a check valve
in the return line, valves to turn off and bleed air out of the return
line, and of course a pump (though there are methods of making thermosyphon
recirculators). My recirculation line is 1/2" and I used a Grundfos pump
with a built-in timer. It runs a few hours in the morning, and a few hours
in the evening to cover most of our likely showering times.

Other than the regular insulation in our floor, I did not insulate our hot
water lines. When the pump is running, it's easy to tell there is heat loss
from the hot water and recirculation lines. The floors above the pipe runs
are warm, like radiant heat. Feels nice on cold mornings. But, it is an
energy loss. It also warms the cold water lines a bit that run close to the
hot water lines. So, we have to run the cold water a few seconds
when we want really cold water. Compared to the rest of our energy use I
haven't noticed any major change in our electric bill (we're all electric
here).

We're on a private well, so I have to think the energy loss from the
recirculation system is offset by not having to run our well pump as often.

I have also read that some people have installed a "U" near
the tank to reduce the loss of heat when hot water is not
being drawn for use.

Heat rises, so if your tank is lower than your fixtures, it might be a
smart idea. In my case, the hot water tank sits above all the plumbing runs
in the crawlspace. So, it makes a "U" naturally by coming up out of the top
of the tank, and heading down to the crawlspace below.

Anthony